News

India to acquire reserves of strategic minerals to power the countrys move into EVs

Kolkata: India's move to acquire reserves of strategic minerals like lithium and cobalt to power the country's move into electric vehicles is all set to become a reality with three state-owned metal and mining companies due to ink a joint venture agreement early next month. 

The jv will have National Aluminium Company (Nalco), Hindustan Copper (HCL) and Mineral Exploration Corporation Ltd (MECL) as partners with a shareholding pattern of 34:33:33 respectively. The initial equity base of the company is expected to be around Rs 100 crore.

“The boards of the respective companies have already cleared the proposal. We hope to sign the agreement within the next one week or so,” HCL chairman Santosh Sharma said adding “we are part of a government initiative to build up strategic reserves of these minerals.” The first acquisition is likely to be finalised within the next six months. Official teams have already visited mines in countries like Peru, Bolivia and Chile, which are rich in such strategic minerals.

India, which has set a target of achieving an all-electric vehicle fleet by 2030, has almost no reserve of these minerals and is keen on building up a strategic reserve of these minerals.

The move is expected to give a big push to Modi government’s efforts to promote and step up use of electric vehicle into the country since lithium and cobalt are key minerals used to make batteries that power electric vehicles. 

Official think tank NITI Aayog has already given its nod for the proposed joint venture.

The Union mines ministry has already directed the three state-owned companies to aggressively look for reserves of lithium and cobalt, which are used to manufacture batteries for electric vehicles, smartphones and laptops, in addition to other precious minerals like tungsten, nickel and rare earths.

Nalco, HCL and MECL have roped in German consultancy DMT as an advisor for the project to advise them on prospective reserves, foreign government rules and regulations, and also help scout for local mining partners.

The jv will be looking at a government to government dispensation for allotment of mines, which is likely to entail fewer risks. Argentina, Bolivia and Chile are widely considered to have the best reserves of lithium and cobalt.